Hit by the third consecutive year of droughts Espirito Santo – the key robusta coffee growing state in Brazil – has seen its output to plunge by more than 50 per cent from normal levels. The robusta coffee, also known as conilon, is used in the internal market, mainly by the instant-coffee industry. The result, as recently observed the Financial Times, was not only driving robusta prices to record levels in Brazil but also sending the international price to a five-year high.
This is one of the reasons why coffee market has been so volatile. The worrying that Brazil would produce less coffee this year than in the previous one materialized. Data released by CECAFE shows that coffee exports from Brazil dropped from 2,6 million 60kg-bags in February 2016 to 2,2 million in the same month of 2017.
Brazil is the main coffee exporter in the world, and their export quantities have the most impact on global coffee prices. To try and cover the deficit in coffee exports, Brazil is planning to import coffee from other Central and Latin American nations. But opposition from Brazilian coffee exporters has been delaying the Government’s decision to import.